Who is responsible for the fees, compensation, and expenses of the Real Estate Appraiser engaged to determine lease terms for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) If we elect to require you to execute and deliver to us or our designee a lease for the Restaurant Location, we shall deliver written notice to you within ten (10) days after the effective date of termination or expiration of this Agreement of such election. Following such notice, you and we shall negotiate in good faith a lease for the Real Estate containing commercially reasonable terms with a term equal to a minimum of the remaining Term under this Agreement. If you and we have not agreed to a lease within thirty (30) days after your receipt of our election, we shall engage a Real Estate Appraiser to prepare a lease with commercially reasonable terms. The Real Estate Appraiser's determination will be binding, and you must
execute and deliver to us a lease for the Restaurant Location containing the commercially reasonable terms provided by the Real Estate Appraiser. All fees, compensation and cost and expense reimbursements of the Real Estate Appraiser shall be borne equally by the parties. Upon your execution of the lease for the Restaurant Location, you agree to vacate the Restaurant Location promptly and completely, rendering all necessary assistance to us to enable us to take prompt possession.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, in the event that Checkersrallys elects to require a franchisee to execute and deliver a lease for the Restaurant Location and the two parties cannot agree on lease terms, a Real Estate Appraiser will be engaged to determine commercially reasonable terms. The determination made by the Real Estate Appraiser will be binding.
The fees, compensation, and cost and expense reimbursements of the Real Estate Appraiser will be equally shared between Checkersrallys and the franchisee. This means that a franchisee would be responsible for 50% of these costs.
This arrangement is fairly typical in franchise agreements when third-party appraisals or valuations are required. It ensures that both parties have a vested interest in the appraiser being fair and reasonable, as they both bear the financial burden. A prospective Checkersrallys franchisee should factor this potential expense into their financial planning, as it could arise if they cannot reach a lease agreement with Checkersrallys upon termination or expiration of their franchise agreement and they own the real estate.